Purchase Apps Break Record; Refis Soar

Purchase applications set a record high and refinance applications soared during the week ended Jan. 16 as the Market Composite Index, an overall measure of mortgage applications, surged from 702.6 to 916.1 on a seasonally adjusted basis, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications rose 35.7% on the week, but they were down 19.6% from the level of a year earlier. The Purchase Index rose from 445.9 to 501.6 on a seasonally adjusted basis, while the Refinance Index soared from 2195.7 to 3327.3. "Spurred by mortgage rates below 6%, the Purchase Index reached a record high and the Refinance Index increased by over 51% last week," said Jay Brinkmann, the MBA's vice president of research and economics. "The Refinance Index increase marks the highest week-to-week percent[age] increase since the week ending Jan. 12, 2001." Refinancings represented 57.7% of total applications, up from 51.6% the previous week, while adjustable-rate mortgages accounted for 27.8%. The average contract interest rate for 30-year fixed-rate mortgages dipped from 5.56% to 5.55%, and points (including the origination fee) decreased from 1.38 to 1.32 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.